Coffee Market Report April 24 2020

The new Brazil harvest is soon to begin in the Conilon robusta areas, to be followed by the main harvesting months within the arabica areas, the latter traditionally set to pick up pace in June each year.  The weather has been reported to remain conducive throughout this largest coffee producer's expansive coffee growing areas and this coming crop with the potential to harvest what many independent forecasters foresee to be a record breaking harvest to come, brings little fresh fundamental news to the markets at this time.  

The latest political developments within Brazil that are seemingly related to differences in political opinion in reaction to the current state of the coronavirus Covid-19 impact within the country that has generated an increase in internal business uncertainty within their markets;  has impacted upon the Brazil Real value to the US Dollar meanwhile, to see this currency which started the week trading at an already low 5.3168, to close the business day yesterday at a new low of 5.5335. 

The news from Vietnam is that the country is has resumed business and trade on a subdued note subsequent to the Vietnamese Government having eased the country’s lockdown restrictions which have been in place since early April.  Although for the most part within the coffee and other agricultural sectors within Vietnam and barring a degree of disruption to flow of goods from the interior, generally business as usual throughout the time. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday; to register this at 60.24 usc/Lb.  This equates to 53.60% price discount for the London Robusta coffee market.     

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 60 bags yesterday; to register these stocks at 1,864,312 bags, with 90.7% of these certified stocks being held in Europe at a total of 1,690,468 bags and the remaining 9.3% being held in the USA at a total of 173,844 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,460 bags.  

The commodity markets were firmer in trade yesterday, to see the overall macro commodity index taking a positive sideways track for the day. The Oil, Natural Gas, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Gold markets ended the day on a positive note, the Sugar market remained unchanged on the day, while the Cocoa and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6986% higher; to see this index registered at 332.2574.   The day starts with the U.S. Dollar steady, trading at 1.234 to Sterling, at 1.076 to the Euro and with the US Dollar buying 5.534 Brazilian Real.     

The New York and London markets started the day yesterday trading around on a positive note, both markets continued on this track into the early afternoon. As the afternoon progressed the London market attracted selling pressure to drop off the highs of the day and settle on a positive note, while the New York market also dropped off the highs of the day in a more aggressive manner to settle on a modest positive note. 

The London market ended the day on a positive and with 93.54% of the earlier gains of the day intact, while subsequent to the lower trend towards the close in New York, this market ended the day on a modest positive note to only retain 12.50% of the earlier gains of the day. This positive close, albeit that the New York market dropped off the highs of the day, might inspire some degree of confidence to possibly set the markets for a hesitant steady start to early trade today, against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT                                    NEW YORK ARABICA USc/Lb.                                                 

JUL    1150 + 29                                                                  JUL    112.40 + 0.35

SEP    1171 + 28                                                                   SEP   113.30 + 0.30

NOV   1189 + 26                                                                   DEC   114.80 + 0.05

JAN    1206 + 22                                                                   MAR  116.30 – 0.15 

MAR   1222 + 19                                                                   MAY  117.20 – 0.20  

MAY   1239 + 19                                                JUL   118.15 – 0.20

JUL     1256 + 19                                                                    SEP    119.15 – 0.20

SEP    1277 + 20                                                 DEC  120.70 – 0.20